Bangalore District Court
Syndicate Bank vs Sri. Lakshmi Paper Products on 10 August, 2021
1 Com.O.S.No.7208 of 2019
IN THE COURT OF THE LXXXVIII ADDL. CITY CIVIL &
SESSIONS JUDGE (EXCLUSIVE COMMERCIAL COURT):
BENGALURU CITY. (CCH-89)
Present: Sri. P.J. SOMASHEKARA, B.A.,LL.M,
LXXXVIII Addl. City Civil & Sessions Judge
Bengaluru City.
Dated this the 10th day of August 2021
Com.O.S.No.7208/2019
Plaintiff: Syndicate Bank, Vishwaneedam Branch,
Sunkadakatte, Magadi Main Road,
Bangalore - 560 091.
Rep by its Manager D. Srinivasulu,
IFSC Code: SYNB0000450,
PAN No.AACCS4699E,
TAN No.BLRS00520C,
Email:[email protected]
Mob. No.944860054.
(By Sri. K.M., Advocate)
-vs-
Defendant: Sri. Lakshmi Paper Products,
Proprietor Narayan T.,
# 502/23, Behind Muthuraya Swamy
Temple, Sunkadakatte, Magadi Main
Road, Bangalore - 560 091.
Aadhar No:341105567090
9535140821, voter ID:REJo364257.
(By Sri. H.M., Advocate)
Nature of the suit Money suit
Date of institution of the 09.10.2019
suit
Date of commencement of 03.08.2021
2 Com.O.S.No.7208 of 2019
recording of the evidence
Date on which the 10.08.2021
judgment was pronounced
Total duration Year/s Month/s Day/s
01 10 01
JUDGMENT
This is a suit filed by the plaintiff bank against the defendant for recovery of Rs.1,26,595.15/- in OSL/TL No.04507910001572 and Rs.8,24,191.27/- in OSL/TL 0450791400681 and Rs.4,09,764.09/- in SOD/Cash Credit Account No.0450124400613 are balance amount, in total amounting in 3 accounts a sum of Rs.13,60,550.51/- with interest @ 13% from 01.09.2019 till its realization and direct the seizure and sale of hypothecated goods and machineries which lying in business premises and residence.
2. Brief facts of the plaint are as under :
The plaintiff bank in its plaint has alleged that the defendant being the proprietary concern namely Sri. Lakshmi Narayan Paper Products represented by its Proprietor T. Narayana, S/o late Thathaiah, situated at No.502/23, Behind Muthurayaswamy Temple, Sunkadhakatte, Magadi Main Road, Machohalli Colony, Chikkagollarahatti village, Bangalore North Taluk, Bangalore. The defendant is engaged in manufacture of paper plates and paper cups etc., approached by filing an application dated 30.11.2015 3 Com.O.S.No.7208 of 2019 and sought for two term loan accounts as OSL/TL, MSE loan account No.0450/791/1572 for Rs.2,00,000/- for improvement of business and interest at 10.95% another OSL/TL MSE Loan account No.0450/991/681 for Rs.14,98,000/- to purchase new machinery for manufacture of papers plates and paper cups at the interest of 10.50%. The 3rd facility SOD/Cash Credit Loan account No.0450/140/802 for Rs.4,00,000/- to manage working capital purpose interest at 10.95% compounded monthly rests for working capital purpose for manufacture of paper plates and paper cups. The defendant loan application has sponsored by Pradhana Mantri Mudra Yojana (PMMY) under SHISHU category.
The defendant is purportedly in the business since 2011 and require to provide security for the loan by way of hypothecation of stocks and paper plates and cups manufacturing machineries all types of paper plates, paper cups accessories and its materials stock in trade valued at Rs.7,40,000/- since the defendant sought loan on a written application dated 30.11.2015 and executed original loan application form along with Prime Minister's Employment Generation Programme - MSME, the assets and liability statement, the loan process note dated 11.01.2016, provision extension of existing limit and sanction letter dated 02.04.2019. After considering the documents, loan has been 4 Com.O.S.No.7208 of 2019 sanctioned for Rs.2,00,000/-, 14,80,000/- for purchase of new machine manufacture of paper cups and paper plates and overdraft account for limit of Rs.4,00,000/- for working capital to be brought into credit once in a year. The 3 loans have covered under CGTMSE CG PAN No.CG202170235713WC.
3. The plaintiff bank in its plaint has further alleged that the 1st loan of Rs.2,00,000/- has to be repaid in 84 EMI of Rs.4,000/-
per month starting from 29.02.2016 and the last installment being due on 31.12.2022. The defendant has executed ASD4 composite hypothecation agreement dated 19.01.2016 for Rs.2,00,000/- interest thereon at 10.95% for improvement of business with hypothecation of stock in trade and executed OG 28A & B consideration receipt dated 18.01.2016 for Rs.2,00,000/-. The defendant has executed ASD 4 dated 16.05.2017 another OSL/TLNo.0450991400681 for Rs.14,98,0000/- to purchase the machinery for manufacture of papers plates and cups etc., interest thereon at 10.50% which is repayable in 60 EMI's with monthly installment of Rs.33,000/- starting from 31.08.2017 and last installment of due on 31.07.2022 with hypothecation of stock and machinery. The defendant has executed OG28 A & B consideration receipt dated 16.05.2017 for Rs.14,80,000/-. The 5 Com.O.S.No.7208 of 2019 cash credit has been sanctioned for working capital purpose account No.045014500802 for Rs.4,00,000/- under SOD overdraft/cash credit on 20.11.2017 to be brought into credit once in a year and also to operate briskly. The defendant had executed an undertaking letter dated 16.05.2017 and abide by the terms and conditions of sanction letter and produced the documents about the Ministry of Micro, Small and Medium Enterprises dated 26.08.2016 along with Udyog Aadhar Memorandum and certificate of skill training. The defendant in consideration of the loan to be granted agreed to the terms and conditions of the bank and executed composite hypothecation agreement ASD-4 dated 19.01.2016, 16.05.2017 and for Rs.2,00,000/-, 14,80,000/- and SOD dated 20.11.2017 for Rs.4,00,000/-. The hypothecation agreement in Schedule-I release along money for manufacture of paper plates and cups etc and in schedule-II repayment terms to be paid first OSL in 84 EMI's of Rs.4,000/- starting from 29.02.2016 and the last installment being due on 31.12.2022 and another OSL/ term loan 60 EMIs Rs.33,000/- and first payment starting from 31.08.2017 and last installment of due on 31.07.2022 and in schedule-III part-A offering security machinery, paper plates and paper cups etc and accessories and stock in trade.
6 Com.O.S.No.7208 of 2019
4. The plaintiff bank in its plaint has further alleged that as per RBI norms 13% p.a. is being charged compounded monthly which includes overdue interest at 2% since the account has been classified as non-performing account and CGTMSENPA marked CGPAN-CG20700235713TC and CG20170235713WC. The rate of interest to be charged subject to modifications by the RBI and as agreed at Clause 3(a) of the composite hypothecation agreement dated 19.01.2016 and 16.05.2017 and the defendant waived the notice of variation in interest as per the directives of RBI. The defendant bound by the covenants agreed upon in the composite agreement and clearly understood the implications of default, such as charging overdue interest, recalling the entire loan etc. The defendant agreed for charge of 2% overdue interest in case of default in bringing to credit and / or interest charged thereupon. The defendant did not operate briskly nor brought to credit once a year or paid interest as agreed, thereby rendering the amount as non performing account, though requested the defendant to regularize the account by way of several letters did not bring the desired results. The defendant is liable to pay Rs.13,60,550.51/- in respect of 3 loan balance with interest till its realization, thereby the legal notice has been issued to the defendant to calling upon him to pay the loan amount which due, 7 Com.O.S.No.7208 of 2019 but in spite of the same did not reply to the said notice nor paid the loan amount. The cause of action for the suit which arose on 19.01.2016 and 16.05.2017 when the term loan has been sanctioned on 16.12.2014 and on all the other dates of admitted credits viz., 02.05.2019 and 18.05.2019 within the jurisdiction of this court and prays for decree the suit.
5. In response of the suit summons, the defendant has been appeared through its counsel and filed the written statement in which has alleged the suit of the plaintiff is not maintainable either in law or on facts and is devoid of merits which is deserved for dismissal and the averments made in para No.1 to 3 needs no reply as it is related to plaintiff advocate address and regarding plaintiff bank and service of summons and the averments which made in Para 4 of the plaint are not fully correct, but admitted that one Narayana T is its Proprietor running the proprietorship concern in the name and style of Sri. Lakshmi Narayan Paper Products in the address which mentioned in the plaint and admitted that has approached the plaintiff bank in need of funds for purchasing machinery and also raw materials for manufacturing paper products and cups and to improve his business, but denied the other allegations made in the same para 8 Com.O.S.No.7208 of 2019 regarding to the borrowings as mentioned and denied that has approached the bank on 30.11.2015 for the loan of Rs.2,00,000/- for improvement of business, for Rs.14,98,000/- for purchase of machinery and Rs.4,00,000/- managing working capital from the 3 accounts and he has stated that he has availed loan of Rs.2,00,000/- , Rs.9,88,400/- and Rs.4,00,000/- from the plaintiff bank for the said purpose and he did not availed loan of Rs.14,98,000/- which alleged and the plaintiff has miscalculated of the said amount by oversight and he is not liable to pay Rs.4,68,000/-, since he has not received Rs.14,98,000/- to purchase the machinery and the plaintiff bank has to strict proof of the same and he has alleged that at the time of loan, the plaintiff bank took his signature not only on the blank loan papers, but also other document. Subsequently has filled the said documents for mentioning the excess amount, so he is not liable to pay the amount which claimed by the bank.
6. The defendant in the written statement has further alleged that he has repaid nearly 75% of the loan amount with interest and there is a remaining balance only Rs.8,88,400/- and he has got all the receipts for having made repayment to the bank and he is liable only Rs.8,88,400/-, not Rs.13,60,550.51/- as alleged 9 Com.O.S.No.7208 of 2019 by the plaintiff bank and the averments made in para 5 of the plaint are partly agreed and partly false and admitted that has approached the plaintiff bank for the loan for the purpose of improve his business of manufacturing the paper plates and cups on 30.11.2015, but denied that he has filed the written aplilcation on 30.11.2015 and admitted that he has produced Prime Minister's Employment Generation Programme for the purpose of taking loan, assets and liability and denied the documents which shown in annexure-B which are false and concocted and he has also denied the loan process note marked as annexure-C which are concocted and the plaintiff bank has to strict proof of the same and the documents which are produced as annexure-C are not within his knowledge which are totally false and denied that he has taken the loan as mentioned in para 5, but he has admitted that he has availed loan of Rs.2,00,000/- for improvement of business and he has also borrowed Rs.9,88,400/- for purchasing of machinery and another 4,00,000/- for working capital, in total has borrowed Rs.14,88,400/- and he did not agreed the rate of interest as alleged in para-4 and the rate of interest is below 8% as prescribed in the said scheme and denied para-6(1) that the averments made in the said para are not fully agreed and he has to clear the loan under the said scheme in 84 10 Com.O.S.No.7208 of 2019 EMIs, but the suit has been filed within 60 months and the suit is not maintainable and he has also repaid the towards the loan amount by selling all the machineries on account of loss sustained by him and the amount which claimed is excessive and illegal and he is not liable to pay the said amount and denied that all the 3 loans have covered under CGTMSE CGPAN No.CG 2017023513WS and he has alleged that the averments made in para-6(i) of the plaint is partly true and partly incorrect and admitted the first loan dated 19.01.2016 for Rs.2,00,000/- which are payable in 85 EMI's starting from 29.02.2016 and the last installment being due on 31.12.2022 and denied that he has executed 4 composite agreement dated 19.01.2016 for Rs.2,00,000/- by agreeing interest thereon at 9.5% by hypothecation of stock in trade which is produced as Annexure E and he has alleged that the plaintiff bank has taken his signature on the blank papers and blank form and filled up the same subsequently.
7. The defendant in his written statement has denied that he has availed the loan of Rs.14,98,000/- for the purchase of machinery to manufacture the paper plates and cups etc., interest thereon at 10.05% which is repayable in 60 EMI with 11 Com.O.S.No.7208 of 2019 monthly installment of Rs.33,000/- starting from 31.08.2017 and the last installment on 31.07.2022 with hypothecation of stock and machinery produced as annexure-E and he has alleged that the statement of accounts which issued by the bank on 03.09.2019 reflects only disbursement of amount of Rs.4,00,000/- and Rs.5,88,400/- through cheques dated 16.05.2017 and 12.10.2017 respectively and these cheques were directly issued to M/s Prasanna Machinery Importers. Puthiamputhur, Tamil Nadu. So, the total loan advance to purchase the machinery is only Rs.9,88,400/- not as claimed by the plaintiff bank and he has not executed receipt to the bank for receipt of Rs.14,80,000/- and the documents which produced in this connection are created and concocted documents and he has admitted the para 6(iii) that he has availed loan of Rs.4,00,000/- for working capital, but denied that he has executed undertaking letter produced as Annexure-K and the plaintiff bank has filled up subsequently on the signed form and he has also denied undertaking letter dated 16.05.2017 containing the terms and conditions after sanction letter and the plaintiff bank has filled the documents subsequently and the plaintiff bank has to strict proof of the same.
12 Com.O.S.No.7208 of 2019
8. The defendant in his written statement has further alleged that the allegation made in para 7 of the plaintiff is not fully correct as he has availed the total loan of Rs.15,88,400/- from all the 3 accounts and he has not taken loan of Rs.20,98,000/- in all 3 accounts as alleged in para 7 of the plaint and actual stock hypothecated to the plaintiff bank as per the invoice is only Rs.10,38,400/- and not the total amount of stock of Rs.17,09,400/- as shown in the schedule of the movables in para 7 and the plaintiff bank has to strict proof of the same and denied para No.8 and 9 of the plaint and the plaintiff has to strict proof of the same and he has alleged that he being the ignorant of law has not understood the covenants in the composites agreements and he has not understood the implication of default as such charging overdue interest the recalling of entire loan are not clearly understood by him and it is all the matter of policy made by the government and who is not liable to pay the overdue interest for committing default, since he has not received any request letters or notices regularize the accounts and he has repaid Rs.7,00,000/- towards the loan amount and the allegations made in para 10 is not correct and apart Rs.2,00,000/- on OD account is not borrowed and same is adjusted to the loan account and the charging of overdue interest @ 13% p.a., on the claim of 13 Com.O.S.No.7208 of 2019 Rs.13,60,660.51/- from 01.09.2019 is mis calculated one and claim is arbitratory and the plaintiff bank has to strict proof of the same and he has alleged that the allegations made in para 12 to 15 are self serving statements and there is no truth in it and the postal acknowledgment are concocted document and prays for dismiss the suit with cost.
9. On the basis of pleadings of the parties, following issues have been framed:
ISSUES
1. Does the plaintiff bank is prove that the defendant has availed three loans as alleged in Para No.5 of the plaint?
2. Does the plaintiff bank is prove that the defendant has failed to keep up his promise as agreed?
3. Does the plaintiff bank is prove that the defendant is due a sum of Rs.13,60,550.51 paise in respect of three loans as alleged?
4. Does the plaintiff bank is entitle for the relief as prayed for?
5. What order or decree?
10. The plaintiff bank in order to prove its plaint averments has examined its Branch Manager as P.W.1 and got marked the documents as Ex.P.1 to P.22. The plaintiff bank has not examined any witnesses in its favour. The defendant has not examined its 14 Com.O.S.No.7208 of 2019 proprietor nor examined any witness or marked any documents in its favour
11. Heard the arguments on the plaintiff side and taken as no arguments on the defendant side.
12. My findings to the above issues are as under
Issue No.1: In the Affirmative;
Issue No.2: In the Affirmative;
Issue No.3: In the Affirmative:
Issue No.4: In the Affirmative; Issue No.5: As per final order, for the following;
REASONS
13. ISSUE NO.1 to 4: These issues are interlinked to each other, hence in order to avoid repetition of facts and materials on record, these issues are discussed together. The plaintiff bank has approached the court on the ground that the defendant being the proprietary concern running the business in the name and style of Sri. Lakshmi Narayan Paper Products approached for financial assistance through its Proprietor and sought for loan, accordingly 3 loans have been sanctioned and the defendant has executed the documents by agreeing to repay the said loans on monthly installments, but the defendant did not keep up its promise as agreed, in spite of repeated request and legal notice issued, 15 Com.O.S.No.7208 of 2019 thereby the plaintiff bank has filed the instant suit against the defendant.
14. The plaintiff bank in order to prove the plaint averments has examined its Branch Manager as P.W.1 who filed his affidavit as his chief-examination by reiterating the plaint averments stating that one T. Narayana being the Proprietor of Sri. Lakshmi Narayan Paper Producer approached the bank on 30.11.2015 requesting the loan for the purpose of manufacture of machinery all type of paper plates, paper cups and accessories and its materials and filed the written application and executed the documents, accordingly loan of Rs.2,00,000/- has been sanctioned on 19.01.2016 and Rs.14,80,000/- has been sanctioned on 16.03.2017 and Rs.4,00,000/- has been sanctioned and the defendant has agreed to repay the said loan amounts along with interest on monthly installments and executed composite hypothecation agreement and other documents, but the defendant in spite of repeated request and legal notice, did not come forward to repay the loan amount which due. Now the defendant is due a sum of Rs.13,60,550.51/- in total amounting to in 3 accounts with interest @ 13% from 01.09.20219 till its realization.
16 Com.O.S.No.7208 of 2019
15. It is an admitted fact the plaintiff Bank has filed the instant suit against the defendant for recovery of Rs.13,60,550.51/- in total amounting to in 3 accounts with interest, on the ground the loans have been sanctioned to the defendant for the purpose of its business. Thus this court drawn its attention on Sec.2(i)(c) of Commercial Courts Act, 2015 which reads like this:
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and
maritime law;
(iv) transactions relating to aircraft,
aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable 17 Com.O.S.No.7208 of 2019 property used exclusively in trade or commerce;
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any
18 Com.O.S.No.7208 of 2019
of the above; and
(xxii) such other commercial disputes as
may be notified by the Central
Government.
The provision under Sec.2(c)(i) which referred above is very much clear ordinary transactions of merchants, bankers, financiers and trades such as those relating to mercantile documents including enforcement and interpretation of such document comes under the definition of commercial dispute, admittedly the plaintiff bank in the plaint itself has alleged that the defendant has availed 3 loans for Rs.2,00,000/-, Rs.14,98,000/- and Rs.4,00,000/- and executed the documents. So, by virtue of the facts which pleaded are clear that the dispute in between the parties is the commercial dispute.
16. Now the question is whether the dispute which stated supra comes under the jurisdiction of commercial court. Thus, this court drawn its attention on Sec.6 of Commercial Courts Act, 2015 which reads like this:
Section 6: Jurisdiction of Commercial Court.
6. The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial dispute of a Specified Value arising out of the entire territory of the State over 19 Com.O.S.No.7208 of 2019 which it has been vested territorial jurisdiction.
Explanation.-For the purposes of this section, a commercial dispute shall be considered to arise out of the entire territory of the State over which a Commercial Court has been vested jurisdiction, if the suit or application relating to such commercial dispute has been instituted as per the provisions of sections 16 to 20 of the Code of Civil Procedure, 1908 (5 of 1908).
The above provision is very much clear that the commercial court shall have the jurisdiction to try all suits and applications relating to commercial dispute.
17. Now the question is whether this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute. Thus, this court drawn its attention on Sec.3 of Commercial Courts Act, 2015 which reads like this:
Section 3: Constitution of Commercial Courts.
3. (1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:20 Com.O.S.No.7208 of 2019
2[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary.] 3[(1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.] The above provision is very much clear that by virtue of the notification specified the pecuniary value of this court which shall not be less than Rs.3,00,000/- Admittedly, the plaintiff in the 21 Com.O.S.No.7208 of 2019 plaint itself has stated that the defendant is due a sum of Rs.13,60,550.51/- with interest. So, this court having the pecuniary jurisdiction to adjudicate the matter which is in dispute by virtue of the provision which stated supra.
18. Though the defendant has been appeared through its counsel and filed the written statement, but the reasons best known to the defendant did not chosen to cross-examine P.W.1 nor led the evidence, thus cross of P.W.1 and evidence on the defendant taken as nil. The defendant in the written statement has denied about availment of the loan which pleaded in para 5 of the plaint on the ground that he did not availed loan of Rs.14,88,400/- which alleged by the plaintiff, but he has admitted about availment of loan of Rs.2,00,000/- and Rs.4,00,000/-. So, according to the defendant, has availed loan of Rs.2,00,000/- and Rs.4,00,000/-. So. for the proper appreciation of the admission of the defendant in the written statement is necessary for reproduction which reads like this:
'Actually the defendant borrowed
Rs.2,00,000/-, Rs.9,88,400/- and
Rs.4,00,000/- from the plaintiff bank for the purposes which mentioned'.
22 Com.O.S.No.7208 of 2019
19. So, if the admission of the defendant in the written statement which referred above is taken into consideration, the defendant has categorically admitted that he has availed loan of Rs.2,00,000/- and Rs.4,00,000/- which alleged in the plaint, though he has disputed about availment of the loan of Rs.14,98,400/- but he has admitted that he has availed loan of R.s9,88,400/- instead of Rs.14,98,000/-, So, one thing is clear the defendant has not disputed either the loan of Rs.2,00,000/- nor Rs.4,00,000/- which alleged by the plaintiff bank, though the defendant in the written statement has taken up the contention that the bank authorities were took his signature on the blank Bank papers and subsequently they have filled up the said loan documents, if that is so nothing is prevented to initiate the legal proceedings against the plaintiff bank on the ground that the bank authorities were concocted the documents by taking his signature on the loan papers, but the reasons best known to the defendant did not placed any materials on record to show that the bank authorities either concocted the documents nor took the signature of the defendant on the blank loan papers and subsequently filled up. Therefore admitted facts which referred above need not be proved in view of Sec.58 of the Indian Evidence Act which reads like this:
23 Com.O.S.No.7208 of 2019
Facts admitted need not be proved. --No fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.
The above provision is very much clear, no fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have been admitted by their pleadings.
20. In the instant case, the defendant has admitted not only Rs.2,00,000/- which availed for the term loan for improvement of business, but also availed Rs.4,00,000/- to manage working capital purpose. Therefore, now the defendant cannot contend that the plaintiff bank has took his signature on the blank loan papers and got concocted the documents and filled up 24 Com.O.S.No.7208 of 2019 subsequently. Thus the contention which raised by the defendant in the written statement on this aspect holds no water.
21. The P.W.1 in his chief-examination has clearly stated the defendant has availed loan of Rs.14,98,000/- to purchase new machinery for manufacture of paper plates and paper cups by agreeing to repay the said amount with interest at 10.50%. Ex.P.9 is the consideration receipt reflects Rs.14,98,000/- has been sanctioned to the defendant to purchase the machinery for manufacture of paper plates and paper cups. So, the defendant after receipt of Rs.14,98,000/- has executed Ex.P.9. Though the defendant in the written statement has taken up the contention that he has availed only Rs.9,88,400/- instead of Rs.14,98,000/-.
20. If at all the defendant was availed Rs.9,88,400/- instead of Rs.14,98,000/- Ex.P.9 would have reflects as alleged by the defendant and moreover the defendant has not placed any materials on record to show that he has availed only Rs.9,88,400/- and he has not availed Rs.14,98,000/- as alleged by the plaintiff bank. So, in the absence of the materials from the defendant side, the annexure-H which marked as Ex.P.9 is very much clear the plaintiff bank has sanctioned Rs.14,98,000/- to purchase of machinery for manufacture of paper plates and cups. 25 Com.O.S.No.7208 of 2019 Ex.P.9 is the letter addressed to M/s Prasanna Machinery Imports, Tamil Nadu reflects after sanction of loan of Rs.14,98,000/-, demand draft of Rs.4,00,000/- has been sent to M/s Prasanna Machinery Imports, Tamil Nadu, as advance amount for supply of paper cup manufacturing machine along with accessories as per quotation dated 14.04.2017. Thus it is clear the loan of Rs.14,98,000/- has been sanctioned to the defendant for the purpose of purchase of machinery for manufacture of paper plates and cups, though the defendant has taken up the contention that he did not know the contents of the loan application and the bank authorities were simply took his signature on the loan papers and subsequently they were filled up has been taken only in order to escape from his liability. Ex.P.4 to P.6 are very much clear the defendant has applied for fresh term loan for sanction of Rs.14,98,000/- for the purpose of purchase of machinery for manufacture of paper cups, accordingly loan has been sanctioned for Rs.14,98,000/-. So, the defendant now cannot contending that he has not availed loan of Rs.14,98,000/-, instead has availed Rs.9,88,400/-, since the defendant has not produced any documents to substantiate his claim as alleged in the written statement. The documents which marked as Ex.P.4 to P.6 and Ex.P.9 are coupled with the oral 26 Com.O.S.No.7208 of 2019 evidence of P.W.1 to show the defendant has availed loan of Rs.14,98,000/- for the purpose of purchase of machinery for manufacture of paper plates and cups. Therefore, the contention which taken by the defendant in the written statement on this aspect holds no water. So, one thing is clear from the evidence of P.W.1 and the admission of the defendant in the written statement as well as documents which marked as Ex.P.4 to 6 and Ex.P.9 that the plaintiff bank has sanctioned loan of Rs.2,00,000/-, Rs.14,98,000/- and Rs.4,00,000/- as alleged in the plaint.
22. The defendant in the written statement has taken up the contention that he has paid almost 75% of the loan amount which he was availed along with interest, but the reasons best known to the defendant, except taking the defence in the written statement nothing is placed on record to show that he has repaid nearly 75% of the loan amount with interest and the defendant is remaining balance only Rs.8,88,400/- as on 30.08.2019. So, in the absence of the materials from the defendant side, it is very difficult to believe that the defendant has availed only Rs.9,88,400/- instead of Rs.14,98,000/- and he was due only Rs.8,88,400/- as on 30.08.2019, instead of Rs.13,60,550.51/- with interest @ 13% as on the date of suit. But on the other hand, the 27 Com.O.S.No.7208 of 2019 Ex.P.1 to P.3 are very much clear the defendant has approached the bank and sought for loan of Rs.2,00,000/- for improvement of business and for Rs.4,00,000/- to manage working capital purpose. So Ex.P.1 to P.3 are coupled with the oral evidence of P.W.1. Ex.P.7 and P.8 are the composite hypothecation agreements which executed by the defendant in favour of the plaintiff bank in respect of the loan which availed by the defendant, though the defendant has disputed the contents which appeared in the said documents, but nothing is placed on record to show that the plaintiff bank got obtained the signature on the blank papers and subsequently concocted and filled up the said documents, as the documents which referred above are reflects the defendant has put his signature after knowing the contents which appeared in the said documents. Ex.P.11 is also very much clear about receipt of Rs.4,00,000/- towards machinery and Ex.P.12 is the letter which addressed to M/s Prasanna Machinery Importers regarding receipt of amount of Rs.5,88,400/- towards final amount for supply of one paper cup manufacturing machine along with accessories. Ex.P.14 is the letter which addressed to the manager of the plaintiff by the defendant in which he has clearly admitted about the loan which sanctioned of Rs.14,98,000/- for the purpose of purchase of 28 Com.O.S.No.7208 of 2019 machinery. If at all Rs.14,98,000/- was not sanctioned, the question of writing a letter to the Manager by the defendant does not arise. Ex.P.16 and P.17 are the certificate of training and certificate of participation are reflects that the defendant has underwent training and got obtained skill for areca leaf plate, cups and paper plates. Ex.P.18 to 22 are the legal notice and the statement of accounts are reflects the plaintiff bank got issued a legal notice to the defendant to calling upon him to clear the loan amount which due and the statement of accounts are reflects the plaintiff bank got issued legal notice to the defendant to calling upon the defendant for payment of the loan amount which due, but the defendant in spite of service of notice, did not come forward to clear the loan amount which due and the defendant was due an amount of Rs.13,60,550.51/- in 3 accounts as on the date of suit with interest @ 13% from 01.09.2019 till its realization. So, one thing is clear from the materials on record, the defendant availed 3 accounts loan and he has utilized the said loans for the purpose which availed but he did not repay the loan amount with interest as agreed, though the defendant has taken up the contention that the suit which filed by the plaintiff is premature, but nothing is placed on record to show that he was not default in payment of installment and he has paid the regular 29 Com.O.S.No.7208 of 2019 installment, even then the plaintiff bank has filed the instant suit against him, if that is so the matter would have been different. Therefore, the contention which taken by the defendant on this aspect holds no water.
23. So, the documents which marked as Ex.P.1 to P.22 are coupled with the oral evidence of P.W.1 and the plaintiff bank has proved its case through oral and documentary evidence that the defendant has availed 3 loans and utilized the said loans for the purpose which availed and the defendant did not repay the loan amount with interest, thereby loan accounts has been declared as NPA and the defendant in spite of notice, did not repay the loan amount with interest. Now the defendant is due a sum of Rs.13,60,550.51/- with interest @ 13%. If at all the defendant was not availed the loans as alleged by the plaintiff bank nor executed the documents by admitting the contents and the interest, he would have chosen to cross-examine the P.W.1 nor entered the witness box for offering cross-examination, but the reasons best known to the defendant, except filing of the written statement, he did not cross-examine the P.W.1 nor entered the witness box or offer for cross-examination. So, mere filing of the written statement nor taking of contention contrary to the plaint 30 Com.O.S.No.7208 of 2019 averments, it does not mean that the defendant has proved his case through oral and documentary evidence. Hence, I am of the opinion that the Issue No.1 to 4 are answered as Affirmative.
24. ISSUE NO.5: In view of my findings to the Issue No.1 to 4 as stated above, I proceed to pass the following;
ORDER The suit of the plaintiff bank is decreed with cost.
The defendant is directed to pay OSL/TL No.04507910001572 balance of Rs.1,26,595.15/-, another OSL/TL04507910000681 for Rs.8,24,191.27/- and SOD/Cash Credit Acc.No.04501240000613 balance of Rs.4,09,764.09/- in total amounting to in three accounts sum of Rs.13,60,550.51/- towards the principal and interest @ 13% compounded at monthly rests from 01.09.2019 till its realization.
Draw decree accordingly.
(Dictated to the Stenographer, transcript thereof corrected by me and then pronounced in the open court on this the 10th day of August, 2021) (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City ANNEXURE P.W.1 Smt. Mytreyi List of witnesses examined on behalf of defendant: 31 Com.O.S.No.7208 of 2019
Nil List of documents exhibited on behalf of plaintiff:
Ex.P.1 Loan application
Ex.P.2 Particulars of Assets and liabilities of the
borrower
Ex.P.3 Loan process note dt:11.01.2016
Ex.P.4 Process note - fresh term loan
Ex.P.5 Provisional extension of the existing limit of
SOD, dt:02.04.2019
Ex.P.6 Letter of sanction dt:11.05.2017
Ex.P.7 Composite hypothecation agreement
dt:18.01.2016
Ex.P.8 Composite hypothecation agreement
dt:16.05.2017
Ex.P.9 Consideration receipt
Ex.P.10 The letter addressed to M/s. Prasanna
Machinery Importers dt:16.05.2017
Ex.P.11 The letter dt:12.10.2017 addressed to Bank
Manager by the defendant
Ex.P.12 Letter dt:12.10.2017 addressed to
M/s.Prasanna Machinery Importers by the
Plaintiff Bank Manager
Ex.P.13 Office note dt:10.11.2017
Ex.P.14 Letter dt:30.11.2017 addressed to Plaintiff
Bank Manager by the defendant
Ex.P.15 Undertaking letter of the defendant
dt:16.05.2017
Ex.P.16 Certificate of training
Ex.P.17 Certificate of participation
Ex.P.18 Legal Notice dt:05.09.2019
Ex.P.19 Postal receipt
Ex.P.20 Postal acknowledgment
32 Com.O.S.No.7208 of 2019
Ex.P.21 Statement of accounts
Ex.P.22 Statement of accounts
List of documents exhibited on behalf of defendant:
Nil (P.J. Somashekara) LXXXVIII Addl. City Civil & Sessions Judge, (Exclusive Commercial Court), Bengaluru City